Correlation Between Charter Hall and Autosports
Can any of the company-specific risk be diversified away by investing in both Charter Hall and Autosports at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Charter Hall and Autosports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Charter Hall Retail and Autosports Group, you can compare the effects of market volatilities on Charter Hall and Autosports and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Charter Hall with a short position of Autosports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Hall and Autosports.
Diversification Opportunities for Charter Hall and Autosports
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Charter and Autosports is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Charter Hall Retail and Autosports Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autosports Group and Charter Hall is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Charter Hall Retail are associated (or correlated) with Autosports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autosports Group has no effect on the direction of Charter Hall i.e., Charter Hall and Autosports go up and down completely randomly.
Pair Corralation between Charter Hall and Autosports
Assuming the 90 days trading horizon Charter Hall Retail is expected to under-perform the Autosports. But the stock apears to be less risky and, when comparing its historical volatility, Charter Hall Retail is 1.47 times less risky than Autosports. The stock trades about -0.01 of its potential returns per unit of risk. The Autosports Group is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 176.00 in Autosports Group on October 12, 2024 and sell it today you would lose (1.00) from holding Autosports Group or give up 0.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charter Hall Retail vs. Autosports Group
Performance |
| Timeline |
| Charter Hall Retail |
| Autosports Group |
Charter Hall and Autosports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Hall and Autosports
The main advantage of trading using opposite Charter Hall and Autosports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Hall position performs unexpectedly, Autosports can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Autosports will offset losses from the drop in Autosports' long position.| Charter Hall vs. Hotel Property Investments | Charter Hall vs. Perseus Mining | Charter Hall vs. Iron Road | Charter Hall vs. Sky Metals |
| Autosports vs. Ras Technology Holdings | Autosports vs. Advanced Braking Technology | Autosports vs. Dug Technology | Autosports vs. Pure Foods Tasmania |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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